[Top 10 Healthcare News in 2024 ⑩] Drug approval fee soars 50 times to ‘hundreds of millions of won’

The year 2024 has been turbulent for the healthcare industry, marked by ongoing conflicts between the medical community and the government over a policy to increase medical school admission quotas by 2,000. Tensions escalated further with the Dec. 3 martial law debacle. Many sectors within the healthcare industry faced significant challenges, with some reporting their worst year on record. Here, we highlight this year's top 10 healthcare news stories. -- Ed

The new drug approval fee is increasing from 8.83 million won to 410 million won (from $5,994 to $278,570).

The Ministry of Food and Drug Safety (MFDS) announced in September the “Amendment to the Fee Regulations for Approval of Drugs” as part of the new drug approval innovation plan, saying it would be applied from January 2025.

The main contents of the new drug approval innovation plan include expediting the approval of new drugs, raising new drug approval fees to a realistic level, enhancing regulatory capabilities, and conducting joint reviews with foreign countries.

The amendments include redefining the fee for new drug approval, which currently stands at 8.83 million won, to 410 million won by fully applying the benefit principle. The government aims to use the new drug approval fee to accelerate patient treatment opportunities and strengthen productization support for the industry by realizing a global level.

To ease the industry's burden, however, a 50 percent fee reduction for small- and medium-sized enterprises applying for a manufacturing drug license and 90 percent for additional similar license applications will be applied.

The increased drug approval fees will mostly pay for the labor costs of experts who specialize in reviewing new drugs in high-tech areas and supporting pharmaceutical companies that apply for them.

Global pharmaceutical companies have expressed dissatisfaction with the drug approval fee hike. The Korea Research-based Pharma Industry Association (KRPIA) said the government’s announcement was “too much.”

The KRPIA agreed with the system's objectives, such as the need to realize new drug approval fees, strengthen review capabilities, and shorten approval periods.

However, it said, “The significant increase in approval fees of nearly 50 times and the sudden announcement of the amendment without a grace period or sequential application is a great burden.”

“Excessive approval fee increases may be another factor that slows the introduction of innovative new drugs with low prevalence or small market size. The January 2025 implementation is a very short time for pharmaceutical companies to prepare for the change,” it said, calling for a grace period of six months to a year.

The MFDS dismissed the KRPIA's claim, saying the increase in drug approval fees was not a sudden announcement.

The innovation plan also includes establishing a dedicated review team for each product to speed up the approval of new drugs, prioritizing clinical trials (GCP) and GMP, and shortening the approval period for new drugs from 420 to 295 days. According to MFDS, each new drug product will have a dedicated review team of 10 to 15 reviewers from clinical, manufacturing, and quality fields to provide specialized consultation between the industry and regulatory agencies at each approval stage.

In addition, to enhance regulatory capabilities, the ministry plans to increase expertise by expanding specialized personnel and customized counseling. It plans to increase the proportion of highly competent reviewers, such as professional doctors and pharmacists, to 70 percent from 30 percent and significantly expand customized development consultations.

Joint review with overseas countries will also be promoted. MFDS plans to lead the international standard of drug review by being recognized as a global regulatory leader through the World Health Organization's (WHO) registration as an excellent regulatory agency for drugs and joint evaluation of approvals with the European Medicines Agency (EMA).